One Good Trade: Inside the Highly Competitive World of Proprietary Trading

Category: Books

A proprietary trading firm consists of a group of professionals who trade the capital of the firm. Their income and livelihood is generated solely from their ability to take profits consistently out of the markets. The world of prop trading is mentally and emotionally challenging, but offers substantial rewards to the select few who can master this craft called trading.

"One Good Trade" is not your typical trading or technical analysis book. In fact, it is really neither of those. The book is very entertaining with all of the anecdotes that Bella spreads across each page that help to give you a glimpse into his world, and the world of a proprietary trader. The largest benefits I received from the book were the various stories of perseverance by many different traders, including the author and another one of SMB's partners/head trader, throughout multiple types of markets. I read this book in two days because I could not put it down, and I have already started to read it again so that I may take notes and absorb even more.

If you are looking for a book on pure technical or fundamental analysis, look elsewhere (although Bella points you in some excellent directions in the book). This book is meant to explain how a proprietary trading firm runs, how their consistently profitable traders have become consistently profitable, and how each reader can take those same strides in their trading.

This review is the subjective opinion of an Investimonials member and not of Investimonials LLC

If you are planning on reading this book to gain day trading knowledge, look else where. However, if you are interested in hearing how a prop firm runs and what its like to work there, look no further. The author does a great job selling his company although he does not talk much on trading strategy aside from dropping the term "one good trade" about 300 time throughout the book.

This review is the subjective opinion of an Investimonials member and not of Investimonials LLC

I purchased the audio version and have listened multiple times. The first part of the book about the prop firm didn't care for it, but the rest of the book has pearls of wisdom. I have listened to "reading the tape" over 10 times just soaking it in like a stock ready to rip. If you don't have this book you are missing out.

This review is the subjective opinion of an Investimonials member and not of Investimonials LLC

The title, "One Good Trade" refers to a process as taught by SMB Capital, a proprietary trading firm which Mr Bellafiore owns with a partner. The process entails following the seven fundamentals taught by SMB through the entry and exit of a trade and then going on to the next trade and following those fundamentals again and repeating this process for the rest of your trading life. The seven fundamentals are detailed in the book. Mr Bellafiore's emphasis is on this process. He states that making and losing money on any specific trade is not the focus, but following this process IS the focus and making one good trade after another by following these fundamentals is the essence of good trading. You can lose money on a trade, but if you follow these fundamentals and this process, your profit and loss statement will ultimately take care of itself. He compares this to sports teams and the way they practice the fundamentals over and over and then execute those fundamentals in the game. There are plenty of sports analogies here with the implication that an elite trader must go through the same kind of rigorous and disciplined training that successful athletes go through. Having played sports in high school and college and now trading full-time, I have to agree. The book begins with the explanation of this process and the principles of this process are felt throughout the book. Mr Bellafiore is not here to teach some new technical analysis technique, thank God. He basically states that his firm already knows those techniques. That's the easy part, the difficult part is training traders to FOLLOW and trade the patterns that he already knows are successful. This reminds me of the statement made by Paul Tudor Jones that you can give most people tomorrow's Wall Street Journal and they will STILL lose money. It's the difference between hitting perfect shots on the driving range and then executing those same shots in a competitive round of golf. The emphasis here is on the psychological side of trading which, for me, is really all there is. It doesn't really matter how well you can call markets if you are exiting trades with a .20 cent profit, because you are so exited about being right and making a little bit of money, when the target on the trade was a dollar, The emphasis is NOT on being right in your market forecasting skills, but on building the skills to execute each trade correctly. So Mr Bellafiore is stating that being right in and of itself is NOT enough, the trading process is MUCH more than calling markets correctly. Being right has much more to do with ego and pride than making money. So paying attention to the fundamentals and their execution rather than bragging rights about market direction is, for Mr Bellafiore, the STARTING point. And executing these fundamentals is MUCH more difficult than one anticipates and requires YEARS of dedication, sweat and hard work. No wonder there are so few elite traders or, for that matter, elite anything. It's not that correctly calling markets is not important, it is, it's just that forecasting becomes secondary to skill building and discipline.

The book is sprinkled throughout with stories of traders, both successful and unsuccessful. I found these stories very interesting and I recognize one of the successful traders from Mr Bellafiore's blog. (A blog that, in my opinion, is worth your time). In one chapter, Mike Bellafiore describes the hiring process at SMB and how difficult it is to choose a person that will succeed as a trader. A Prop firm funds traders that they train and the firm makes money based upon the success or failure of these traders.

Later on the author details some of the strategies commonly used by SMB traders. On the surface, these are similar to patterns which I think most traders are familiar with. The difference is in the application of these strategies and for that I think one may need to go through the SMB Training. I started trading before Prop firms became as popular as they are today. If I was just starting out today, I believe this is the route I would take if I was fortunate enough to be chosen. The hiring process is VERY selective. Mike Bellafiore is big on traders getting out there and sharing and exchanging ideas. As most independent traders know, this is a lonely profession. It doesn't have to be, but most traders are in a room full of screens with only their own minds and a few internet feeds. For me, I am happy Mike Bellafiore took the time to exchange his ideas with us. I am currently reading the book for the second time. This is definitely a book worth adding to your trading library.

This review is the subjective opinion of an Investimonials member and not of Investimonials LLC

Mike Bellafiore runs a chop shop that rips off many traders (SMB Capital) but I have to hand it to him.

He is a great author, entertaining story teller, and he doesn't BS you. He tells the truth about prop trading.... actual facts.

Facts like: its an extremely tough industry, judged daily by p&l, and only a handful make it. It's as similar as you can get to athletics, as far as intellectual endeavors go. You really, REALLY need to love trading, eat sleep & breathe the markets to make it. There is a learning curve that you can't really map. So much effort goes into preparing and executing the trade, but you are judged on the bottom line which is: did you or did you not generate profits.

He seems to be a little sexist (lots of jokes about dumb NYC girls falling for ugly traders with money) but it's not in bad taste. Great story telling, the characters at his firm really come alive.

Too bad his company is a total scam.

This review is the subjective opinion of an Investimonials member and not of Investimonials LLC

While it was interesting to learn about how Mike became a successful trader and ultimately ran his trading desk, the book too often trended towards patting him and Steve on the back for how much better the way they ran things was and doesnt truly highlight that despite their tutelage traders will fail. While their way may truly be the best for day trading and their desk one of the premiere, it just had a tone that i found a bit annoying over the course of the book. I still watch their videos actively and enjoy their market commentary. Also disclosure: I interviewed with SMB, reaching the second round, two years ago but did not land a position. I promise this experience in no way influenced this review as I have had nothing but positive interactions with them both during and after the process.

This review is the subjective opinion of an Investimonials member and not of Investimonials LLC

Mike Bellafiore do present himself and his shop very realistic in my opinion. He believes in hard work and being interested in what you do.

Their trading ideas are just ideas. During the entire book he keeps stressing the importance of cutting losses early. As he says, the alternative ends careers in this business.

What stands out to be is the way he describes different market conditions, and how to respond to them. You have to be dynamic and able to change your strategy all the time. I think many traders are looking for the one good trading strategy that will always work. In my experience this does not exist.

This review is the subjective opinion of an Investimonials member and not of Investimonials LLC